STABLE leasing from traditional and Information Technology and Business Process Management (IT-BPM) occupiers buoyed the office market in the third quarter of 2025, amid a corruption scandal hounding senior government officials, Leechiu Property Consultants (LPC) said.
From January to September, total office demand reached 966,000 square meters (sq m), equivalent to 88 percent of last year’s full-year peak of 1.1 million sq m. LPC said the figure indicated a sustained business activity despite political headwinds.
According to LPC associate director Ed Gador, the controversy has underscored long-standing concerns about governance but has not derailed market confidence.
‘Actually, it’s a spotlight now more than ever that the corruption that’s been plaguing the government, and we believe that there’s more accountability,’ Gador said in a market briefing held Monday in Makati City.
‘We expect that there will be much improvement and more accountability moving forward,’ he added.
Firms have also remained active in selecting spaces, LPC commercial leasing senior manager Erika Manasan said, with many prioritizing master-planned townships that offer flood protection and power reliability, particularly in flood-prone provinces.
‘They’re more keen to look for master planned townships,’ she said. ‘These townships are usually protected by flood.and they have their internal ways to control flood and, of course, power reliability.’
In Metro Manila, Quezon City’s Vertis, Centris, Araneta and Bridgetowne have drawn increased interest from occupiers this year, she said.
Similar demand has been recorded in Davao, Cebu, and Toledo in Cebu, where township developments are expanding.
Vacancy
Meanwhile, total vacant space in the third quarter rose to 193,000 square meters, up 4 percent from 186,000 sqm in the previous quarter.
Vacancies were led by traditional offices (117,000 sq m), followed by IT-BPM firms (60,000 sq m), Philippine Inland Gaming Operator (PIGO) (15,000 sq m) and Philippine Offshore Gaming Operator (POGO) (1,000 sq m).
Manasan told BusinessMirror contractions among PIGO firms mirrored the space withdrawals previously recorded from POGOs.
‘PIGO contracted space, almost the same number as the POGO contractions last quarter,’ she said on the sidelines of the event.
‘That just goes to show how the industry of PIGO is not that stable yet.Until such time that we see them provide solid numbers on their demand.we can’t call them yet as a mature industry.’
From January to September, total vacated space reached 647,000 sq m.
Among IT-BPM firms, 52 percent of vacated spaces were due to relocation, 24 percent to consolidation and 24 percent to downsizing. Traditional firms cited relocation (82 percent) as the primary reason for movement.
In the third quarter alone, 253,000 sq m of new demand offset the space turnover, resulting in a net demand of 60,000 sq m.
Metro Manila posted an 18-percent vacancy rate, while provincial markets shared the same vacancy level. Of the total demand, 78 percent came from Metro Manila and 22 percent from provincial areas.
By segment, traditional firms accounted for 46 percent of total demand, followed by IT-BPM firms (45 percent), government agencies (5 percent) and PIGO (4 percent).
Developers, Gador added, are expected to continue delivering ‘best-in-class projects and facilities’ to sustain leasing momentum amid a changing political and economic climate.